reconsideration evaluation dated … evaluation dated december 13, 2013, of the certificate of need...

RECONSIDERATION EVALUATION DATED DECEMBER 13 2013 OF THE

CERTIFICATE OF NEED APPLICATION SUBMITTED BY OLYMPIA

ORTHOPAEDIC ASSOCIATES PLLC PROPOSING TO ESTABLISH A SIX

OPERATING ROOM AMBULATORY SURGERY CENTER IN THURSTON COUNTY

APPLICANT DESCRIPTION

There are two main entities associated with this project Olympia Orthopaedic Associates PLLC

and Olympia Orthopaedic Properties LLC Below is a brief description of each entity

Olympia Orthopaedic Associates PLLC (OOA) is a for-profit Washington State corporation

governed by the following 11 physicians located in Olympia Washington Each of the 11

physicians has equal ownership of this corporation [source Washington State Secretary of State

website and April 22 2013 department staff meeting notes]

Name Name Name

L (Laddie) Anthony Agtarap Andrew P Manista Steven William Snow

Clyde T Carpenter R (Robert) Trent McKay P (Peter) Brodie Wood

Patrick Joseph Halpin William Warren Peterson Jerome P Zechmann

Thomas Scott Helpenstell Dennis Edward Smith

OOA includes the medical business and all employees of the practice The following three

clinics are under this corporation

Name Address City

OOA Eastside Clinic 615 Lilly Road NE Olympia

OOA Westside Clinic 3901 Capitol Mall Drive SW Olympia

OOA Yelm Clinic 201 Tahoma Boulevard SE Yelm

The Westside Clinic identified in bold above has a Certificate of Need exempt ambulatory

surgery center (ASC) located at the same site [source Application p10]

Olympia Orthopaedic Properties LLC was created in January 2000 for the purpose of owning

and leasing property to OOA This corporation is governed by the following four physicians

[source Washington State Secretary of State website]

Clyde T Carpenter Patrick Joseph Halpin Dennis Edward Smith P (Peter) Brodie Wood

For this project Olympia Orthopaedic Associates PLLC [OOA] is the applicant

On May 14 2001 OOA obtained an exemption from Certificate of Need review for the

establishment of an ambulatory surgery center [ASC] known as Olympia Surgery Center (OSC)

At that time the ASC and practice were located at 1625 Mottman Road in Tumwater within

Thurston County The ASC was established and remained in the same location until mid-year

20111 Surgeries performed at the exempt ASC were those typically associated with orthopedic

services

1 Determination of Reviewability (DOR) 01-20

Page 2 of 15

On April 7 2011 OOA obtained a second exemption from Certificate of Need review for the

establishment of an ASC at a new site in Thurston County The new site is 3925 Capitol Mall

Drive Southwest in Olympia [98502] Once the practice and the exempt ASC were operating at

the new site on Capitol Mall Drive services ceased at the former Mottman Road site2

PROJECT DESCRIPTION

One limitation of an exempt ASC is that only physicians that are part of the group practice may

use the surgery center OOA wants to allow access to the surgery center to physicians that are

not part of the group practice This action requires OOA to obtain a Certificate of Need for the

ASC

OSC is currently licensed and has been in operation at the new site since obtaining the exemption

in 2011 Under the exemption OSC has operated with four operating rooms (ORs) pre- and

post-operative and recovery rooms administrationreception space and physician offices

[source July 26 2013 supplemental information Revised Exhibit 11] If this project is approved

OOA would equip and begin using two more ORs currently built out at the ASC for a facility

total of six new CN approved ORs [source Application p12]

A wide range of orthopedic and pain procedures are currently provided at OSC for patients 8

years of age and older Typical procedures include joint reconstructionreplacement various

arthroscopic procedures arthritic and wound care foot and ankle procedures trauma hand and

upper extremity surgery orthopedic spine and neurosurgery occupational medicine

interventional pain management physical and occupational therapy and sports medicine If this

project is approved OOA intends to expand the procedures beyond orthopedic and pain

management procedures currently provided Additional services include ENT GI urology

GYN plastic surgery dermatology and operations of the nervous system OOA does not intend

to provide any ophthalmology or cardiology procedures or provide services to patients less than

8 years of age [source November 18 2013 reconsideration documents]

When an exempt ASC is established within twelve months before an application is submitted

the department requires the applicant to identify the capital costs for its establishment Those

costs are then used to determine the estimated capital expenditure of the project even though the

costs may already be expended The capital expenditure for this project is $10665145 Of that

amount $10216223 was expended in year 2011 when OOA constructed and equipped the 4-OR

exempt ASC The remaining $448922 is for the equipment and associated taxes necessary to

open ORs 5 and 6 [source July 26 2013 supplemental information pp2-3]

If this project is approved OOA anticipates OR 5 would become operational by June 2014 and

OR 6 would become operational by January 2015 [source Application p15] Under this

timeline year 2015 would be the ASCrsquos first full calendar year of operation as a CN approved

ASC with six ORs

2 Exemption requests are specific to the facts in place at the time of the request Once the practice

relocated and Olympia Orthopaedic Associates wanted to establish an exempt ASC at the new site a new

exemption is required [source DOR 11-23]

Page 3 of 15

BACKGROUND INFORMATION ON THE PROJECT On October 4 2013 the department issued a conditional approval of OOArsquos application The

conditional approval is restated below

Project Description

This certificate approves the establishment of a six operating room surgery center

in Olympia within Thurston County Services provided at the ambulatory surgery

center are limited to the orthopedic and pain management procedures described in

the application

Conditions

1 Approval of the project description as stated above Olympia Orthopaedic

Associates PLLC further agrees that any change to the project as described in

the project description is a new project that requires a new Certificate of Need

2 Olympia Orthopaedic Associates PLLC will provide charity care at Olympia

Surgery Center in compliance with the charity care policies reviewed and

approved by the Department of Health Olympia Orthopaedic Associates

PLLC will use reasonable efforts to provide charity care in an amount

comparable to or exceeding the average amount of charity care provided by the

two hospitals currently operating in the Thurston County planning area

Currently this amount is 287 gross revenue and 666 of adjusted revenue

Olympia Orthopaedic Associates PLLC will maintain records documenting the

amount of charity care it provides and demonstrating compliance with its

charity care policies

Condition 1 above limited OOArsquos surgical procedures to orthopedic and pain management On

October 22 2013 OOA submitted a request for reconsideration related to the limitation of

procedures On October 30 2013 the department granted OOArsquos reconsideration request A

reconsideration hearing was conducted on November 18 2013 During the hearing OOA

provided additional documentation related to the limitation of procedures This document is the

evaluation of the reconsideration information

APPLICABILITY OF CERTIFICATE OF NEED LAW

This project is subject to Certificate of Need review as the establishment of a new healthcare

facility under the provisions of Revised Code of Washington (RCW) 7038105(4)(a) and

Washington Administrative Code (WAC) 246-310-020(1)(a)

EVALUATION CRITERIA

WAC 246-310-200(1)(a)-(d) identifies the four determinations that the department must make

for each application WAC 246-310-200(2) provides additional direction in how the department

is to make its determinations It states

ldquoCriteria contained in this section and in WAC 246-310-210 246-310-220 246-310-230

and 246-310-240 shall be used by the department in making the required determinations

(a) In the use of criteria for making the required determinations the department shall

consider

(i) The consistency of the proposed project with service or facility standards

contained in this chapter

Page 4 of 15

(ii) In the event the standards contained in this chapter do not address in sufficient

detail for a required determination the services or facilities for health services

proposed the department may consider standards not in conflict with those

standards in accordance with subsection (2)(b) of this section and

(iii) The relationship of the proposed project to the long-range plan (if any) of the

person proposing the projectrdquo

In the event the WAC 246-310 does not contain service or facility standards in sufficient detail to

make the required determinations WAC 246-310-200(2)(b) identifies the types of standards the

department may consider in making its required determinations Specifically WAC 246-310-

200(2)(b) states

ldquoThe department may consider any of the following in its use of criteria for making the

required determinations

(i) Nationally recognized standards from professional organizations

(ii) Standards developed by professional organizations in Washington state

(iii) Federal Medicare and Medicaid certification requirements

(iv) State licensing requirements

(v) Applicable standards developed by other individuals groups or organizations with

recognized expertise related to a proposed undertaking and

(vi) The written findings and recommendations of individuals groups or organizations

with recognized expertise related to a proposed undertaking with whom the

department consults during the review of an applicationrdquo

To obtain Certificate of Need approval the applicant must demonstrate compliance with the

criteria found in WAC 246-310-210 (need) 246-310-220 (financial feasibility) 246-310-230

(structure and process of care) 246-310-240 (cost containment)3 Additionally WAC 246-310-

270 (ambulatory surgery) contains service or facility specific criteria for ASC projects and must

be used to make the required determinations

RECONSIDERATION EVALUATION CRITERIA

WAC 246-310-570 outlines the grounds that the department may deem to show good cause for

reconsideration For this project OOA identified its grounds for reconsideration under

subsection (2)(b)(iii) which states

ldquoEvidence the department materially failed to follow adopted procedures in reaching a

decisionrdquo

The reconsideration issue raised by OOA focuses on the types of procedures proposed to be

provided at the ASC if the project is approved The review for a reconsideration project is

limited to only those criteria that were identified in the reconsideration request however the

result of the departmentrsquos reconsideration review may impact other review criteria within the

application

3 Each criterion contains certain sub-criteria The following sub-criteria are not relevant to this project

WAC 246-310-210(3) (4) (5) and (6) WAC 246-310-220(2) and (3) and WAC 246-310-240(3)

Page 5 of 15

TYPE OF REVIEW

This application was reviewed under the regular review timeline outlined in WAC 246-310-160

which is summarized below

APPLICATION CHRONOLOGY

Action Olympia Orthopaedic Associates PLLC

Letter of Intent Submitted May 24 2013

Application Submitted July 1 2013

Departmentrsquos pre-review activities

including screening and responses

July 2 2013

through August 1 2013

Beginning of Review August 2 2013

End of Public Comment

public comments accepted through the end of public

comment

No public hearing requested or conducted

September 6 2013

Rebuttal Comments 4 September 23 2013

Departments Anticipated Decision Date November 7 2013

Departments Actual Decision Date October 4 2013

RECONSIDERATION REVIEW CHRONOLOGY


Request for Reconsideration October 22 2013

Department Grants Reconsideration October 30 2013

Reconsideration Public Hearing Conducted November 18 2013

Reconsideration Rebuttal Comments Due5 December 5 2013

Departments Anticipated Reconsideration Decision Date January 21 2014

Departments Actual Reconsideration Decision Date December 13 2013

AFFECTED PERSONS Washington Administrative Code 246-310-010(2) defines lsquoaffected personrsquo as

ldquohellipan interested person who

(a) Is located or resides in the applicants health service area

(b) Testified at a public hearing or submitted written evidence and

(c) Requested in writing to be informed of the departments decisionrdquo

During the initial review of this project the department identified Providence St Peter Hospital

as the only entity that sought and received affected person status During the reconsideration

review the department discovered an error in this conclusion Providence St Peter Hospital did

4 The only documents determined to be public comment were the ASC utilization surveys submitted by

existing providers in Thurston County during the departments annual survey The applicant chose not to

provide rebuttal comments on these documents 5 Only the applicant and department staff attended the reconsideration hearing Only the applicant

provided comments at the reconsideration hearing The applicant is precluded from providing rebuttal

comments on their own comments

Page 6 of 15

not request interested or affected person status on this application6 As a result no entities

sought or received affected person status during the initial or reconsideration review of this

project

INITIAL APPLICATION SOURCE INFORMATION REVIEWED

Olympia Orthopaedic Associates PLLCrsquos Certificate of Need application submitted July 1

2013

Olympia Orthopaedic Associates PLLCrsquos supplemental information received July 26 2013

and July 31 2013

Completed hospital and ambulatory surgery center utilization surveys for operating room use

and capacity for Thurston County

Data obtained from the DOH Integrated Licensing amp Regulatory System [ILRS] database for

operating room use and capacity for facilities located in Thurston County

Data obtained from the DOH Construction Review Services website

[httpsfortresswagovdohconstructionreviewlookup]

Licensing andor quality of care survey data provided by the Department of Healthrsquos

Investigations and Inspections Office

Department of Health Health Systems Quality Assurance Provider Credential Information

Washington State Secretary of State website [wwwsoswagov]

Washington State Department of Revenue website [wwwdorwagov]

Certificate of Need historical files

RECONSIDERATION SOURCE INFORMATION REVIEWED

Olympia Orthopaedic Associates PLLCrsquos reconsideration request received October 22 2013

Olympia Orthopaedic Associates PLLCrsquos reconsideration information submitted at the

November 18 2013 reconsideration public hearing

The Department of Healthrsquos initial evaluation release on October 4 2013

CONCLUSION

For the reasons stated in this evaluation the application submitted by Olympia Orthopaedic

Associates PLLC proposing to establish a Certificate of Need approved ambulatory surgery

center is consistent with the applicable review criteria provided Olympia Orthopaedic

Associates PLLC agrees to the following in its entirety

Project Description

This certificate approves the establishment of a six operating room surgery center in Olympia

within Thurston County Services provided at the ambulatory surgery center include orthopedic

pain management ENT GI urology GYN plastic surgery dermatology and operations of the

nervous system OOA does not intend to provide any ophthalmology or cardiology procedures

or provide services to patients less than 8 years of age

6 Providence St Peter Hospital submitted a letter on July 11 2013 requesting interested person status

related to a letter of intent filed by Capital Medical Center rather than this Olympia Orthopedic

Associates application

Page 7 of 15

Conditions

1 Approval of the project description as stated above Olympia Orthopaedic Associates

PLLC further agrees that any change to the project as described in the project description is

a new project that requires a new Certificate of Need

2 Olympia Orthopaedic Associates PLLC will provide charity care at Olympia Surgery

Center in compliance with the charity care policies reviewed and approved by the

Department of Health Olympia Orthopaedic Associates PLLC will use reasonable efforts

to provide charity care in an amount comparable to or exceeding the average amount of

charity care provided by the two hospitals currently operating in the Thurston County

planning area Currently this amount is 287 gross revenue and 666 of adjusted

revenue Olympia Orthopaedic Associates PLLC will maintain records documenting the

amount of charity care it provides and demonstrating compliance with its charity care

policies

Approved Cost

The total capital expenditure for this project is $10665145 Of that amount $10216223 was

expended in year 2011 when Olympia Orthopaedic Associates PLLC constructed and equipped

the 4-operating room Certificate of Need exempt ambulatory surgery center The remaining

$448922 is for the equipment and associated taxes necessary to open ORs 5 and 6 The

approved capital expenditure associated with this project is $10665145

Page 8 of 15

CRITERIA DETERMINATIONS

A Need (WAC 246-310-210) and Ambulatory Surgery (WAC 246-310-270) Based on the source information reviewed and the applicantrsquos agreement to the conditions

identified in the conclusion section of this evaluation the department determines that

Olympia Orthopaedic Associates PLLCs project has met the need criteria in WAC 246-310-

210(1) and (2) and the ambulatory surgery center methodology and standards outlined in the

WAC 246-310-270

(1) The population served or to be served has need for the project and other services and

facilities of the type proposed are not or will not be sufficiently available or accessible to

meet that need

WAC 246-31-270(9)-Ambulatory Surgery Numeric Methodology

Initial Evaluation Summary

In its October 4 2013 initial evaluation the department concluded that OOA met this sub-

criterion This conclusion was reached based on the numeric need methodology outlined in

WAC 246-310-270(9) and the applicants demonstration that need for additional operating

room capacity was needed in the Thurston County planning area Additionally OOA met the

ASC requirement under WAC 246-310-270(6) by demonstrating that the ASC would have a

minimum of two operating rooms [source October 4 2013 initial evaluation pp6-9]

Reconsideration Review

In its reconsideration documents OOA identified the pages and tables within the initial

application where OOA provided extensive discussion of its intent to expand services at the

ASC beyond orthopedic and pain management Under the lsquoneedrsquo criterion specific areas

that discuss the services to be provided are

Table 11 on page 25 provides the projected number of surgeries by procedure for the

Thurston County planning area

Table 12 on page 26 provides OOArsquos the market share assumptions by procedure

and

Table 13 page 26 provides OOArsquos projected number of surgeries by procedure

Using the data in tables 11 and 12 OOA identified its projected number of procedures

broken down by type for year 2014 through 2018 The table on the following page is a

summary of Table 13 provided in the initial application and restated in OOArsquos

reconsideration documents

Page 9 of 15

Table 1

Olympia Surgery Centerrsquos

Projected Number of Surgeries by Type

Procedure 2014 2015 2016 2017 2018

Nervous System 282 303 326 338 350

Endocrine System 12 13 14 15 15

Eye 0 0 0 0 0

Ear 59 63 68 70 73

Nose Mouth amp Pharynx 152 163 175 181 188

Respiratory System 8 8 9 9 10

Cardiovascular System 0 0 0 0 0

Digestive System 1018 1091 1175 1218 1262

Urinary System 78 84 91 94 97

Male Genital Organs 14 15 16 16 17

Female Genital Organs 68 73 78 81 84

Musculoskeletal System 4910 5262 5667 5872 6085

Integumentary System 474 508 547 567 588

Total Procedures 7075 7583 8166 8461 8768

Each procedure is prefaced with the phrase lsquooperations on thersquo

As noted in the table above consistent with OOArsquos discussion in the application OOA does

not intend to provide any ophthalmology or cardiology procedures Additionally consistent

with OOArsquos request for reconsideration OOA intended to expand its services beyond

orthopedic and pain management and provided data to determine the number of surgeries by

procedure

Based on the reconsideration information provided the department concludes that this sub-

criterion is met

(2) All residents of the service area including low-income persons racial and ethnic minorities

women handicapped persons and other underserved groups and the elderly are likely to

have adequate access to the proposed health service or services



criterion This conclusion was reached based on a review of the Admission Policy and

Charity Care Policy provided in the application Additionally OOA demonstrated its intent

to serve Medicare and Medicaid patients and provide charity care at the average percentage

of the two hospitals in the planning area [source October 4 2013 initial evaluation pp9-11]


There was no additional information reviewed in this reconsideration that would change the

departmentrsquos initial conclusion With the charity care condition described in the conclusion

section of this evaluation this sub-criterion remains met

0 of 15

B Financial Feasibility (WAC 246-310-220)

Based on the source information reviewed and the applicantrsquos agreement to the conditions


Olympia Orthopaedic Associates PLLCs project has met the financial feasibility criteria in

WAC 246-310-220

(1) The immediate and long-range capital and operating costs of the project can be met

WAC 246-310 does not contain specific WAC 246-310-220(1) financial feasibility criteria as

identified in WAC 246-310-200(2)(a)(i) There are also no known recognized standards as

identified in WAC 246-310-200(2)(a)(ii) and (b) that directs what the operating revenues and

expenses should be for a project of this type and size Therefore using its experience and

expertise the department evaluates if the applicantrsquos pro forma income statements reasonably

project the proposed project is meeting its immediate and long-range capital and operating

costs by the end of the third complete year of operation



criterion This conclusion was reached based on a review of OOArsquos assumptions used to

project the number of procedures to be provided at the surgery center The projected number

of procedures identified in Table 1 in this reconsideration evaluation was used as a basis for

the pro forma Revenue and Expense Statement and Balance Sheets provided in the initial

application [source October 4 2013 initial evaluation pp11-14]


In its initial application OOA based its financial projections on the expanded surgeries

discussed in the application Under this reconsideration revisions to the Revenue and

Expense Statement or the Balance Sheets were not necessary As a result there was no

additional information reviewed in this reconsideration that would change the departmentrsquos

initial conclusion This sub-criterion remains met

(2) The costs of the project including any construction costs will probably not result in an

unreasonable impact on the costs and charges for health services



identified in WAC 246-310-200(2)(a)(ii) and (b) that directs what an unreasonable impact on

costs and charges would be for a project of this type and size Therefore using its experience

and expertise the department compared the proposed projectrsquos costs with those previously

considered by the department



criterion This conclusion was reached based on a review of OOArsquos capital expenditure and

projected payer mix for the ASC [source October 4 2013 initial evaluation pp14-15]



departmentrsquos initial conclusion This sub-criterion remains met

Page 11 of 15

(3) The project can be appropriately financed

WAC 246-310 does not contain specific source of financing criteria as identified in WAC

246-310-200(2) (a) (i) There are also no known recognized standards as identified in WAC

246-310-200(2) (a) (ii) and (b) that directs how a project of this type and size should be

financed Therefore using its experience and expertise the department compared the

proposed projectrsquos source of financing to those previously considered by the department



criterion This conclusion was reached based on a review of OOArsquos capital expenditure of

$10665145 and recognition that 96 of the costs [$10216223] had already been expended

when the exempt ASC was built in 2012 At that time the ASC was built with four

completed ORs and shelled-in space for two additional ORs The remaining $448922 will

be financed through OOArsquos cash reserves A review of OOArsquos current Balance Sheet

demonstrated that the funds are available for the project [source October 4 2013 initial

evaluation p15]




C Structure and Process (Quality) of Care (WAC 246-310-230)



Olympia Orthopaedic Associates PLLCrsquos project has met the structure and process of care

criteria in WAC 246-310-230

(1) A sufficient supply of qualified staff for the project including both health personnel and

management personnel are available or can be recruited

WAC 246-310 does not contain specific WAC 246-310-230(1) criteria as identified in WAC

246-310-200(2)(a)(i) There are also no known recognized standards as identified in WAC

246-310-200(2)(a)(ii) and (b) that directs what specific staffing patterns or numbers of FTEs

that should be employed for projects of this type or size Therefore using its experience and

expertise the department compared the proposed projectrsquos source of financing to those

previously considered by the department



criterion This conclusion was reached based on a review of OOArsquos current and projected

FTEs for the ASC The staff table identified an increase in staff beginning in year 2014 that

would continue through year 2016 The increase was based on the addition of physicians and

expansion of procedures In year 2014 OOA expected to begin using OR 5 and using OR

6 in year 2015 [source October 4 2013 initial evaluation p16]


In its initial application OOA based its staffing projections on the expanded surgeries

discussed in the application Under this reconsideration revisions to the staffing table were

not necessary As a result there was no additional information reviewed in this

Page 12 of 15

reconsideration that would change the departmentrsquos initial conclusion This sub-criterion

remains met

(2) The proposed service(s) will have an appropriate relationship including organizational

relationship to ancillary and support services and ancillary and support services will be

sufficient to support any health services included in the proposed project

WAC 246-310 does not contain specific WAC 246-310-230(2) as identified in WAC 246-

310-200(2) (a) (i) There are also no known recognized standards as identified in WAC 246-

310-200(2)(a)(ii) and (b) that directs what relationships ancillary and support services should

be for a project of this type and size Therefore using its experience and expertise the

department assessed the materials contained in the application



criterion This conclusion was reached based on a review of OOArsquos history of providing

orthopedic and pain management services at the CN exempt ASC As a current provider

OOA had already established long standing support and ancillary services with existing

health providers Additionally the department reviewed OOArsquos Quality

AssessmentUtilization Review and Performance Improvement Policy used at the surgery

center The policy defines roles and responsibilities and focuses on improved surgical

outcomes [source October 4 2013 initial evaluation p17]




(3) There is reasonable assurance that the project will be in conformance with applicable state

licensing requirements and if the applicant is or plans to be certified under the Medicaid or

Medicare program with the applicable conditions of participation related to those

programs


246-310-200(2) (a) (i) There are known recognized standards as identified in WAC 246-

310-200(2) (a) (ii) and (b) that a facility must meet when it is to be Medicare certified and

Medicaid eligible As part of its review the department must conclude that the proposed

service would be operated in a manner that ensures safe and adequate care to the public7

Therefore using its experience and expertise the department assessed the applicantrsquos history

in meeting these standards at other facilities owned or operated by the applicant



criterion This conclusion was reached based on a review of OOArsquos facility compliance

history and the compliance history of current ASC staff at the exempt ASC The department

also reviewed the compliance history of OOArsquos medical director and other key lsquoleadrsquo staff of

the ASC specifically the Clinical Director ASC Pre-opPACU Quality AssuranceRisk

Management Central SterileSurgical TechnologistPurchasing and

AdministrationCredentialing

[source October 4 2013 initial evaluation pp17-18]

7 Also WAC 246-310-230(5)

Page 13 of 15




(4) The proposed project will promote continuity in the provision of health care not result in an

unwarranted fragmentation of services and have an appropriate relationship to the service

areas existing health care system


246-310-200(2)(a)(i) There are no known recognized standards as identified in WAC 246-

310-200(2)(a)(ii) and (b) that directs how to measure unwarranted fragmentation of services

or what types of relationships with a services arearsquos existing health care system should be for

a project of this type and size Therefore using its experience and expertise the department

assessed the materials in the application



criterion This conclusion was reached based on a review of OOArsquos current continuity in

providing health care to the residents of Thurston County and surrounding areas

Documentation provided in the initial application demonstrated that the surgery centerrsquos

change from an exempt facility to a Certificate of Need approved facility would not cause

unwarranted fragmentation of the existing healthcare system [source October 4 2013 initial

evaluation p18]




(5) There is reasonable assurance that the services to be provided through the proposed project

will be provided in a manner that ensures safe and adequate care to the public to be served

and in accord with applicable federal and state laws rules and regulations



criterion based on its ability to meet the sub-criterion in sub-section (3) above [source

October 4 2013 initial evaluation p19]




D Cost Containment (WAC 246-310-240)



Olympia Orthopaedic Associates PLLCrsquos project has met the cost containment criteria in

WAC 246-310-240

Page 14 of 15

(1) Superior alternatives in terms of cost efficiency or effectiveness are not available or

practicable

WAC 246-310 does not contain specific WAC 246-310-240(2)(a) criteria as identified in

WAC 246-310-200(2)(a)(i) There are known minimum building and energy standards that

healthcare facilities must meet to be licensed or certified to provide care If built to only the

minimum standards all construction projects could be determined to be reasonable

However the department through its experience knows that construction projects are usually

built to exceed these minimum standards The department considered information in the

applications that addressed the reasonableness of their construction projects that exceeded the

minimum standards Therefore using its experience and expertise the department assessed

the materials contained in the application

To determine if a proposed project is the best alternative the department takes a multi-step

approach Step one determines if the application has met the other criteria of WAC 246-310-

210 thru 230 If it has failed to meet one or more of these criteria then the project is

determined not to be the best alternative and would fail this sub-criterion

If the project met the applicable criteria the department would move to step two in the

process and assess the other options the applicant or applicants considered prior to submitting

the application under review If the department determines the proposed project is better or

equal to other options the applicant considered before submitting their application the

determination is either made that this criterion is met (regular or expedited reviews) or in the

case of projects under concurrent review move on to step three

Step three of this assessment is to apply any service or facility specific criteria (tie-breaker)

contained in WAC 246-310 The tiebreaker criteria are objective measures used to compare

competing projects and make the determination between two or more approvable projects

which is the best alternative If WAC 246-310 does not contain any service or facility

criteria as directed by WAC 246-310-200(2)(a)(i) then the department would look to WAC

246-310-240(2)(a)(ii) and (b) for criteria to make the assessment of the competing proposals

If there are no known recognized standards as identified in WAC 246-310-200(2)(a)(ii) and

(b) then using its experience and expertise the department would assess the competing

projects and determine which project should be approved



criterion based on its consideration of alternatives considered Additionally since OOA

intended to allow access to the ASC by physicians that are not members or employees of the

group practice the department recognized that that OOArsquos only alternative was to submit this




departmentrsquos initial conclusion Additionally with OOArsquos intent to expand its services

beyond orthopedic and pain management again OOArsquos only alternative is to submit this

application This sub-criterion remains met

Page 15 of 15

(2) In the case of a project involving construction

(a) The costs scope and methods of construction and energy conservation are reasonable

and

(b) The project will not have an unreasonable impact on the costs and charges to the public

of providing health services by other persons



criterion based on its ability to meet the sub-criterion in sub-section WAC 246-310-220(2)

above [source October 4 2013 initial evaluation pp20-21]




14-01 Recon cover letterpdf

14-01 recon evalpdf

of 15

On April 7 2011 OOA obtained a second exemption from Certificate of Need review for the

establishment of an ASC at a new site in Thurston County The new site is 3925 Capitol Mall

Drive Southwest in Olympia [98502] Once the practice and the exempt ASC were operating at

the new site on Capitol Mall Drive services ceased at the former Mottman Road site2

PROJECT DESCRIPTION

One limitation of an exempt ASC is that only physicians that are part of the group practice may

use the surgery center OOA wants to allow access to the surgery center to physicians that are

not part of the group practice This action requires OOA to obtain a Certificate of Need for the

ASC

OSC is currently licensed and has been in operation at the new site since obtaining the exemption

in 2011 Under the exemption OSC has operated with four operating rooms (ORs) pre- and

post-operative and recovery rooms administrationreception space and physician offices

[source July 26 2013 supplemental information Revised Exhibit 11] If this project is approved

OOA would equip and begin using two more ORs currently built out at the ASC for a facility

total of six new CN approved ORs [source Application p12]

A wide range of orthopedic and pain procedures are currently provided at OSC for patients 8

years of age and older Typical procedures include joint reconstructionreplacement various

arthroscopic procedures arthritic and wound care foot and ankle procedures trauma hand and

upper extremity surgery orthopedic spine and neurosurgery occupational medicine

interventional pain management physical and occupational therapy and sports medicine If this

project is approved OOA intends to expand the procedures beyond orthopedic and pain

management procedures currently provided Additional services include ENT GI urology

GYN plastic surgery dermatology and operations of the nervous system OOA does not intend

to provide any ophthalmology or cardiology procedures or provide services to patients less than

8 years of age [source November 18 2013 reconsideration documents]

When an exempt ASC is established within twelve months before an application is submitted

the department requires the applicant to identify the capital costs for its establishment Those

costs are then used to determine the estimated capital expenditure of the project even though the

costs may already be expended The capital expenditure for this project is $10665145 Of that

amount $10216223 was expended in year 2011 when OOA constructed and equipped the 4-OR

exempt ASC The remaining $448922 is for the equipment and associated taxes necessary to

open ORs 5 and 6 [source July 26 2013 supplemental information pp2-3]

If this project is approved OOA anticipates OR 5 would become operational by June 2014 and

OR 6 would become operational by January 2015 [source Application p15] Under this

timeline year 2015 would be the ASCrsquos first full calendar year of operation as a CN approved

ASC with six ORs

2 Exemption requests are specific to the facts in place at the time of the request Once the practice

relocated and Olympia Orthopaedic Associates wanted to establish an exempt ASC at the new site a new

exemption is required [source DOR 11-23]

Page 3 of 15



Project Description




the application

Conditions
























EVALUATION CRITERIA







consider



Page 4 of 15










200(2)(b) states






















decisionrdquo





application



Page 5 of 15

TYPE OF REVIEW









July 2 2013





comment


September 6 2013

























Page 6 of 15



project



2013


and July 31 2013


















CONCLUSION





Project Description









Page 7 of 15

Conditions












policies

Approved Cost






Page 8 of 15






WAC 246-310-270



meet that need

















and






Page 9 of 15

Table 1



Procedure 2014 2015 2016 2017 2018

Nervous System 282 303 326 338 350


Eye 0 0 0 0 0

Ear 59 63 68 70 73
















procedure


criterion is met














Page 10 of 15





WAC 246-310-220





































Page 11 of 15















evaluation p15]




























Page 12 of 15


remains met
























programs

















7 Also WAC 246-310-230(5)

Page 13 of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15



Project Description




the application

Conditions
























EVALUATION CRITERIA







consider



Page 4 of 15










200(2)(b) states






















decisionrdquo





application



Page 5 of 15

TYPE OF REVIEW









July 2 2013





comment


September 6 2013

























Page 6 of 15



project



2013


and July 31 2013


















CONCLUSION





Project Description









Page 7 of 15

Conditions












policies

Approved Cost






Page 8 of 15






WAC 246-310-270



meet that need

















and






Page 9 of 15

Table 1



Procedure 2014 2015 2016 2017 2018

Nervous System 282 303 326 338 350


Eye 0 0 0 0 0

Ear 59 63 68 70 73
















procedure


criterion is met














Page 10 of 15





WAC 246-310-220





































Page 11 of 15















evaluation p15]




























Page 12 of 15


remains met
























programs

















7 Also WAC 246-310-230(5)

Page 13 of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15










200(2)(b) states






















decisionrdquo





application



Page 5 of 15

TYPE OF REVIEW









July 2 2013





comment


September 6 2013

























Page 6 of 15



project



2013


and July 31 2013


















CONCLUSION





Project Description









Page 7 of 15

Conditions












policies

Approved Cost






Page 8 of 15






WAC 246-310-270



meet that need

















and






Page 9 of 15

Table 1



Procedure 2014 2015 2016 2017 2018

Nervous System 282 303 326 338 350


Eye 0 0 0 0 0

Ear 59 63 68 70 73
















procedure


criterion is met














Page 10 of 15





WAC 246-310-220





































Page 11 of 15















evaluation p15]




























Page 12 of 15


remains met
























programs

















7 Also WAC 246-310-230(5)

Page 13 of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15

TYPE OF REVIEW









July 2 2013





comment


September 6 2013

























Page 6 of 15



project



2013


and July 31 2013


















CONCLUSION





Project Description









Page 7 of 15

Conditions












policies

Approved Cost






Page 8 of 15






WAC 246-310-270



meet that need

















and






Page 9 of 15

Table 1



Procedure 2014 2015 2016 2017 2018

Nervous System 282 303 326 338 350


Eye 0 0 0 0 0

Ear 59 63 68 70 73
















procedure


criterion is met














Page 10 of 15





WAC 246-310-220





































Page 11 of 15















evaluation p15]




























Page 12 of 15


remains met
























programs

















7 Also WAC 246-310-230(5)

Page 13 of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15



project



2013


and July 31 2013


















CONCLUSION





Project Description









Page 7 of 15

Conditions












policies

Approved Cost






Page 8 of 15






WAC 246-310-270



meet that need

















and






Page 9 of 15

Table 1



Procedure 2014 2015 2016 2017 2018

Nervous System 282 303 326 338 350


Eye 0 0 0 0 0

Ear 59 63 68 70 73
















procedure


criterion is met














Page 10 of 15





WAC 246-310-220





































Page 11 of 15















evaluation p15]




























Page 12 of 15


remains met
























programs

















7 Also WAC 246-310-230(5)

Page 13 of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15

Conditions












policies

Approved Cost






Page 8 of 15






WAC 246-310-270



meet that need

















and






Page 9 of 15

Table 1



Procedure 2014 2015 2016 2017 2018

Nervous System 282 303 326 338 350


Eye 0 0 0 0 0

Ear 59 63 68 70 73
















procedure


criterion is met














Page 10 of 15





WAC 246-310-220





































Page 11 of 15















evaluation p15]




























Page 12 of 15


remains met
























programs

















7 Also WAC 246-310-230(5)

Page 13 of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15






WAC 246-310-270



meet that need

















and






Page 9 of 15

Table 1



Procedure 2014 2015 2016 2017 2018

Nervous System 282 303 326 338 350


Eye 0 0 0 0 0

Ear 59 63 68 70 73
















procedure


criterion is met














Page 10 of 15





WAC 246-310-220





































Page 11 of 15















evaluation p15]




























Page 12 of 15


remains met
























programs

















7 Also WAC 246-310-230(5)

Page 13 of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15

Table 1



Procedure 2014 2015 2016 2017 2018

Nervous System 282 303 326 338 350


Eye 0 0 0 0 0

Ear 59 63 68 70 73
















procedure


criterion is met














Page 10 of 15





WAC 246-310-220





































Page 11 of 15















evaluation p15]




























Page 12 of 15


remains met
























programs

















7 Also WAC 246-310-230(5)

Page 13 of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15





WAC 246-310-220





































Page 11 of 15















evaluation p15]




























Page 12 of 15


remains met
























programs

















7 Also WAC 246-310-230(5)

Page 13 of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15















evaluation p15]




























Page 12 of 15


remains met
























programs

















7 Also WAC 246-310-230(5)

Page 13 of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15


remains met
























programs

















7 Also WAC 246-310-230(5)

Page 13 of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15




















evaluation p18]


















WAC 246-310-240

Page 14 of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15


practicable








































Page 15 of 15



and











14-01 recon evalpdf

of 15



and











14-01 recon evalpdf

reconsideration evaluation dated … evaluation dated december 13, 2013, of the certificate of need...

Documents